Mixed Messages in Delivery Plan could harm Development of Offshore Industry and cost thousands of Jobs

London, England | July 17, 2013

RenewableUK welcomed the publication of the Consultation on the draft Electricity Market Reform Delivery Plan today as another step in the EMR process, but expressed concern about the 2030 scenarios outlined in it; most of which see only a very limited role for development of wind during the 2020s. Based on predicted capacity by 2020 – in all but the high offshore wind scenario – the Government envisages very little additional capacity of both onshore and offshore wind. In some scenarios Government is predicting less wind energy than its existing high end estimate in 2020.

The trade association warned that to reduce costs, the industry needed a large scale market and development at the levels outlined in the central scenario would lead to a substantial reduction in the potential for number of jobs in the offshore wind industry describing the scenario as “bad for growth, bad for jobs, and bad for popularity.”

Maf Smith, Deputy Chief Executive of RenewableUK said:

“The renewables sector is working hard to deliver low carbon secure electricity for UK consumers, while reducing costs and delivering jobs. The catalyst for all this is stable policy and a long term outlook from Government. The long running electricity market reform process has taken the foot off the accelerator on investment; to remedy that we now need to see Government start going up the gears and locking in a renewable energy success story. The UK has a massive opportunity on offshore wind to get the jobs in as we are deploying the technology first and it would be tragic if we squandered that and let our European competitors take the spoils.

“Each month we see another piece of the policy jigsaw, and we are starting to see a clearer picture, and clarity builds confidence. But we are also seeing that Government risks undermining confidence by scaling back on its ambitions. Industry is waiting for the Offshore Industrial Strategy, and an important part of this will be the long term signal Government sends. The Scenarios set out today show that Government is still in mixed minds about the role of renewables.

“Industry needs to know that Government has confidence that industry can deliver its cost reduction targets. Yet five of the six scenarios seem to assume that offshore wind will not deliver on a shared industry-government target to reduce costs down to £100/MWh by 2020. This suggests low confidence in the sector and could undermine investment. Industry understands that its success relates to its ability to deliver cost reduction and economic benefit. But that needs to be a shared starting assumption not something left for the next Government to pass judgement on.”

The Association also queried how the low levels of projected deployment for renewables in the 2020s would play out with the public given research published just yesterday which urged Government to move away from finite fossil fuels and to develop renewables. The study also stated that people’s attitude toward nuclear was better if it was developed with renewables.

Smith also warned that the lack of long term certainty for the industry would not just have employment and growth impacts but would also make it harder to reduce costs.

Smith said:

“Not only do you lose the benefits of economies of scale if you only have restricted production, but both the Crown Estate and the Offshore Cost Reduction Task Force have stated that getting a supply chain established in the UK is part of bringing down costs. By first shaving down numbers for 2020 and then putting forward low numbers for 2030 our ability to bring costs down is restricted. Overall the central scenario is bad for growth, bad for jobs, and bad for popularity,”

Commenting on the rest of the delivery plan Smith stated: “It’s good to see that there are upcoming solutions on the islands issue and route to market, but clearly we need to see what these look like alongside the Contract for Difference full design coming out later this summer before we comment on their workability.”

RenewableUK is the UK’s leading renewable energy trade association, specialising in onshore wind, offshore wind and wave & tidal energy. Formed in 1978, we have an established, large corporate membership ranging from small independent companies, to large international corporations and manufacturers. Acting as a central point of information and a united, representative voice for our membership, we conduct research; find solutions; organise events, facilitate business development, and promote wind and marine renewables to government, industry, the media and the public. Our vision is for renewable energy to play a leading role in powering the UK.